McqMate
1. |
A set of guidelines about dividend is known as _____ _____. |
A. | dividend policy |
B. | profit |
C. | loss |
D. | expenses |
Answer» A. dividend policy |
2. |
There are two approaches to dividend policy _____ _____. |
A. | relevance, irrelevance |
B. | final dividend |
C. | interims dividend |
D. | annual dividend |
Answer» A. relevance, irrelevance |
3. |
XBRL stands for _____ _____ _____ _____. |
A. | u.s securities exchange communication adopted a final rule for adoption |
B. | ifsb released an expanded ifrs, xbrl |
C. | extensible business reporting language |
D. | ifar |
Answer» C. extensible business reporting language |
4. |
XBRL presents solution to _____ problem. |
A. | registered company |
B. | government corporation |
C. | communication |
D. | unregistered company |
Answer» C. communication |
5. |
The project with _____ co-efficient of variation should be selected. |
A. | lesser |
B. | management |
C. | higher |
D. | medium |
Answer» A. lesser |
6. |
Under standard deviation _____ of cash flow is ascertained. |
A. | dispersion |
B. | subjective |
C. | objective |
D. | comparative |
Answer» A. dispersion |
7. |
Capital rationing is selection of investment proposal under _____. |
A. | constraint |
B. | weakness of capital market |
C. | funds are scare today |
D. | very strong |
Answer» A. constraint |
8. |
_____ provides details of compliance of corporate governance. |
A. | annual report |
B. | board of directors |
C. | independent audit committee |
D. | employees |
Answer» A. annual report |
9. |
Investment in venture capital fund carries _____% risk. |
A. | 1.5 |
B. | 2 |
C. | 1 |
D. | 0.5 |
Answer» A. 1.5 |
10. |
MPBF refers to |
A. | maximum permissible bank finance |
B. | minimum permissible bank financ |
C. | bank overdraft |
D. | cash credit |
Answer» A. maximum permissible bank finance |
11. |
Ploughing back of profit means |
A. | declaration of dividend |
B. | retainning profits |
C. | re-investing profits |
D. | building reserves |
Answer» B. retainning profits |
12. |
The first taxonomy for financial reporting was released on |
A. | 30th june,2003 |
B. | 31st july,2000 |
C. | 26th january, 2003 |
D. | 15th august, 2009 |
Answer» B. 31st july,2000 |
13. |
Banks in India have to achieve C.A. Ratio of |
A. | 9% |
B. | 15% |
C. | 5% |
D. | 10% |
Answer» A. 9% |
14. |
Amalgamation is governed by |
A. | as 14 |
B. | as 3 |
C. | as 21 |
D. | as 32 |
Answer» A. as 14 |
15. |
The % of provision required on sub-standard asset on secured portion is: |
A. | 15% |
B. | 12% |
C. | 10% |
D. | 5% |
Answer» A. 15% |
16. |
The % of provision on unsecured portion of doubtful asset is: |
A. | 125% |
B. | 100% |
C. | 75% |
D. | 25% |
Answer» B. 100% |
17. |
Cash credit and overdrafts is considered as NPA when is remains out of order for more than: |
A. | 90 days |
B. | 30 days |
C. | 60 days |
D. | 45 days |
Answer» A. 90 days |
18. |
The models known as bird in the hand argument |
A. | gordon\s model |
B. | walter\s model |
C. | fayol’s model |
D. | henry model |
Answer» A. gordon\s model |
19. |
Loans upto Rs. 1,00,000 against gold and silver ornaments carry risk |
A. | 50% |
B. | 10% |
C. | 100% |
D. | 20% |
Answer» B. 10% |
20. |
Provision for standard asset in respect of advances to commercial Real Estate sector is |
A. | 1% |
B. | 2% |
C. | 2% |
D. | 0% |
Answer» D. 0% |
21. |
The policy in which less dividend is paid is |
A. | liberal dividend policy |
B. | conservative dividend policy |
C. | stable dividend policy |
D. | fluctuating dividend policy |
Answer» B. conservative dividend policy |
22. |
Present Value of a Rupee is always: |
A. | equal to its future value. |
B. | greater than its future value. |
C. | less than its future value |
D. | is not related to its future value |
Answer» C. less than its future value |
23. |
An ideal current ratio must be------ |
A. | 2 : 1 |
B. | 1 : 2 |
C. | 1 : 1 |
D. | 2.5 : 1 |
Answer» A. 2 : 1 |
24. |
The abbreviation "IPO" stands for----- |
A. | indian public offer |
B. | indian post office |
C. | initial private offer |
D. | initial public offering. |
Answer» D. initial public offering. |
25. |
…... shares are issued free of cost |
A. | equity |
B. | rights |
C. | preference. |
D. | bonus |
Answer» D. bonus |
26. |
SEBI Act was passed in the year------ |
A. | 1956 |
B. | 1988 |
C. | 1992 |
D. | 1947 |
Answer» C. 1992 |
27. |
Goodwill is an example of ---- asset |
A. | tangible. |
B. | intangible. |
C. | fictitious |
D. | current |
Answer» B. intangible. |
28. |
Traditionally UTI was a----- |
A. | bank |
B. | mutual fund. |
C. | financial institution |
D. | insurance company |
Answer» B. mutual fund. |
29. |
Members of recognised stock exchanges are termed as |
A. | brokers |
B. | underwriters |
C. | shareholder s |
D. | lead managers. |
Answer» A. brokers |
30. |
A shareholder invests in a Company's Shares mainly------ |
A. | for capital appreciation |
B. | to receive dividends. |
C. | to receive bonus and rights shares |
D. | to receive interest on investment regularly. |
Answer» A. for capital appreciation |
31. |
Which of the following is not applicable to IRR? |
A. | considers all cash flows |
B. | based on time value of money |
C. | common for all projects |
D. | stated in % return |
Answer» C. common for all projects |
32. |
PQR Ltd. Is a profit-making company. It is absorbed into another group company XYZ Ltd. Which is a loss Company. This case is off |
A. | hostile takeover bid |
B. | horizontal merger |
C. | reverse merger |
D. | takeover |
Answer» C. reverse merger |
33. |
ABC Ltd. acquires hundred percent of preference share capital of PQR Ltd. It would result in |
A. | hostile takeover bid |
B. | vertical merger |
C. | no relationship |
D. | holding subsidiary relationshi p |
Answer» D. holding subsidiary relationshi p |
34. |
TCs Ltd. acquires HCL Ltd., MPS of HCL Ltd. Is Rs.20 and EPS is Rs. 5 for an exchange ratio of 1.5: 1, what was the PE ratio used in acquiring HCL Ltd.? |
A. | rs. 4 |
B. | rs. 5 |
C. | rs. 6 |
D. | rs. 2.67 |
Answer» C. rs. 6 |
35. |
Commercial papers is a type of |
A. | fixed coupon bond |
B. | unsecured short term debt |
C. | equity share capital |
D. | governmen t bond |
Answer» B. unsecured short term debt |
36. |
Which of the followings is an item of Current Liability? |
A. | bank balance |
B. | bank overdraft |
C. | cash balance |
D. | unsecured loans |
Answer» B. bank overdraft |
37. |
In the Balance-sheet----- stock is indicated |
A. | opening |
B. | closing |
C. | average |
D. | finished goods |
Answer» B. closing |
38. |
Rights issue is also called as ----- |
A. | privileged subscription. |
B. | equity shares |
C. | stock dividend. |
D. | bonus shares |
Answer» A. privileged subscription. |
39. |
…… increases the number of shares without actually increasing the paid - up value of the share capital. |
A. | consolidation of shares. |
B. | stock split- ups |
C. | bonus issue |
D. | rights issue |
Answer» B. stock split- ups |
40. |
A merchant banker------- |
A. | is a bank of merchants and businessmen. |
B. | provides loan to merchants. |
C. | accepts deposits from merchants. |
D. | renders corporate advisory services. |
Answer» D. renders corporate advisory services. |
41. |
Decision involving purchase of fixed assets are also termed as: |
A. | capital structure decisions. |
B. | capital budgeting |
C. | capital restructurin g |
D. | capital mix decisions |
Answer» B. capital budgeting |
42. |
A Balance Sheet tallies; because: |
A. | it is based on double entry system of accounting |
B. | it is based on single entry system of accounting. |
C. | all accounts are computerise d. |
D. | total of assets equals to the total of liabilities |
Answer» A. it is based on double entry system of accounting |
43. |
Which of the following is a security on a moveable property? |
A. | pledge |
B. | mortgage |
C. | hypothecati on |
D. | lien |
Answer» C. hypothecati on |
44. |
Time value of Money is based on the principle of: |
A. | a stich in time saves nine |
B. | a bird in hand; is worth two in a bush. |
C. | as you sow; so shall you reap. |
D. | hard work pays in the long run |
Answer» B. a bird in hand; is worth two in a bush. |
45. |
An ideal liquid ratio must be ----- |
A. | 1 : 1 |
B. | 1 : 2 |
C. | 2 : 1 |
D. | 1.33 : 1 |
Answer» A. 1 : 1 |
46. |
The abbreviation "SIP" in a mutual fund stands for----- |
A. | simple investment plan |
B. | systematic investment plan |
C. | small investment plan |
D. | social investment programme |
Answer» B. systematic investment plan |
47. |
In case of Mutually Exclusive proposals |
A. | only the best project is selected |
B. | all projects with positive npv is are selected |
C. | even negative npv project may be selected |
D. | at least two proposals are selected |
Answer» A. only the best project is selected |
48. |
Payback period Technique is based on |
A. | all cash flows |
B. | only higher cash flows |
C. | earlier cash flows |
D. | selected cash flows |
Answer» C. earlier cash flows |
49. |
Which of the following method of evaluation of capital budgeting proposals focuses on liquidity? |
A. | internal rate of return |
B. | net present value |
C. | accounting rate of return |
D. | payback period |
Answer» D. payback period |
50. |
Which of the following methods focuses the maximisation of wealth of shareholders? |
A. | accounting rate of return |
B. | payback period |
C. | profitability index |
D. | internal rate of return |
Answer» C. profitability index |
51. |
Evaluation of Capital Budgeting Proposals is based on Cash flows because: |
A. | cash flows are easy to calculate |
B. | cash flows are suggested by sebi |
C. | cash is more important than profit |
D. | cash flows are unable to prepared |
Answer» C. cash is more important than profit |
52. |
Which of the following is not included in incremental A flows? |
A. | opportunity costs |
B. | sunk costs |
C. | change in working capital |
D. | inflation effect |
Answer» A. opportunity costs |
53. |
Savings in respect of a cost is treated in capital budgeting as: |
A. | an inflow |
B. | an outflow |
C. | nil |
D. | as one |
Answer» A. an inflow |
54. |
Which of the following is not a risk factor in capital budgeting ? |
A. | industry specific risk factors |
B. | competition risk factors |
C. | project specific risk factors |
D. | interest risk factors |
Answer» B. competition risk factors |
55. |
NPV of a proposal, as calculated by RADR real CE Approach will be: |
A. | same |
B. | unequal |
C. | zero |
D. | equal |
Answer» C. zero |
56. |
In weighted average cost of capital, rising in interest rate leads to- |
A. | increase in cost of debt |
B. | increase the capital structure |
C. | decrease in cost of debt |
D. | decrease the capital structure |
Answer» A. increase in cost of debt |
57. |
National Ltd. Has 12,000 equity shares of Rs.100 each. Sale price is equity share Rs.115 per share; flotation cost Rs.5 per share. Expected dividend growth rate is 5% and expected dividend at the end of the financial year is Rs.11 per share, What is the cost of equity shares of National Ltd? |
A. | 0.1133 |
B. | 0.1278 |
C. | 0.1475 |
D. | 0.15 |
Answer» D. 0.15 |
58. |
Black & White Ltd. Has a cost of equity of 11% and a pre-tax cost of debt of 8.5%. The firm's target Weighted average cost of capital is 9% and its tax rate is 35%. What is the firm's target debt-equity ratio? |
A. | 0.6203 |
B. | 0.5756 |
C. | 0.5572 |
D. | 0.5113 |
Answer» B. 0.5756 |
59. |
The term "capital structure" refers to: |
A. | current assets & current liabilities |
B. | long-term debt, preferred stock, and common stock equity |
C. | total assets minus liabilities |
D. | shareholde rs\ equity |
Answer» B. long-term debt, preferred stock, and common stock equity |
60. |
The manner in which an organization's assets are financed is referred to as its- |
A. | capital structure |
B. | financial structure |
C. | asset structure |
D. | owners structure |
Answer» B. financial structure |
61. |
In ……. Approach, the capital structure decision is relevant to the valuation of the firm. |
A. | Net income |
B. | miller and modigilani |
C. | traditional |
D. | net operating income |
Answer» A. Net income |
62. |
………… is defined as the length of time required to recover the initial cash outlay. |
A. | Pay back period |
B. | inventory conversion period |
C. | discounted cash back |
D. | budgeted period. |
Answer» A. Pay back period |
63. |
The term capital structure refers to |
A. | Long term debt, preferred stock and common stock equity |
B. | Current asset and current liabilities |
C. | Total asset minus liabilities |
D. | Shareholder’s equity |
Answer» A. Long term debt, preferred stock and common stock equity |
64. |
In walter model formula D stands for |
A. | Dividend per share |
B. | Direct dividend |
C. | Dividend earning |
D. | None of these |
Answer» A. Dividend per share |
65. |
Financing methods for merger and acquisition exclude: |
A. | Cash |
B. | Convertible bond |
C. | Vendor placing |
D. | Overdraft |
Answer» D. Overdraft |
66. |
Convertible bonds are not : |
A. | Straight bonds |
B. | Two stage financial instrument |
C. | Converted to ordinary shares |
D. | Hybrid securities |
Answer» A. Straight bonds |
67. |
A ---------- lease is a way of providing finance |
A. | Finance |
B. | Commercial |
C. | Economic |
D. | None of these |
Answer» A. Finance |
68. |
Economic value added is based on the -------? |
A. | Profit |
B. | Residual wealth |
C. | Gross wealth |
D. | None of these |
Answer» B. Residual wealth |
69. |
MVA stands for |
A. | Maximum value added |
B. | Market value added |
C. | Minimum value added |
D. | Most value added |
Answer» B. Market value added |
70. |
A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the remaining assets more efficiently is engaging in __________. |
A. | Strategic acquisition |
B. | A financial acquisition |
C. | Two tier tender offer |
D. | Shark repellent |
Answer» B. A financial acquisition |
71. |
The ways in which mergers and acquisitions (M&As) occur do not include: |
A. | conglomerate takeover |
B. | diversification |
C. | vertical integration |
D. | horizontal integration |
Answer» B. diversification |
72. |
Which of the following capital budgeting methods has the value additive property? |
A. | NPV |
B. | IRR |
C. | Payback period |
D. | Discounted payback period |
Answer» A. NPV |
73. |
How is economic value added (EVA) calculated? |
A. | It is the difference between the market value of the firm and the book value of equity. |
B. | It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge. |
C. | It is the net income of the firm less a dollar cost that equals the weighted average cost of capital multiplied by the book value of liabilities and equities. |
D. | None of the above are |
Answer» B. It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital charge. |
74. |
Retained earnings are |
A. | an Indication of a company’s liquidity |
B. | the same as cash in the bank |
C. | not important when determining dividends |
D. | the cumulative earnings of the company after dividends |
Answer» D. the cumulative earnings of the company after dividends |
75. |
Economic value added provides a measure of |
A. | how much value is added by the economy |
B. | how much value is added by operations |
C. | how much a business affects the economy |
D. | how much wealth a company is creating compared to its cost of capital. |
Answer» D. how much wealth a company is creating compared to its cost of capital. |
76. |
In …… approach says that capital structure decision is relevant to the valuation of the firm. |
A. | Traditional |
B. | Net income |
C. | Modiglani and Millers |
D. | Net operating income |
Answer» B. Net income |
77. |
______ is defined as the length of time required to recover the initial cash outlay. |
A. | Payback period |
B. | Discounted cash back |
C. | IRR |
D. | NPV |
Answer» A. Payback period |
78. |
The term capital structure refers to………….. |
A. | Shareholders equity |
B. | Current asset and current liabilities |
C. | Total asset minus liabilities |
D. | Composition of debt and equity |
Answer» D. Composition of debt and equity |
79. |
In Walter model alphabet ‘D’ in the formula stands for…….. |
A. | Dividend per share |
B. | Dividend earning |
C. | Direct dividend |
D. | None of these |
Answer» A. Dividend per share |
80. |
A critical assumption of NOI (Net operating income approach) to valuation is that… |
A. | Debt and equity levels remain unchanged. |
B. | Dividends increase at constant rate |
C. | Overall cost of capital is independent of the degree of leverage |
D. | Interest expenses and taxes are included in calculation |
Answer» C. Overall cost of capital is independent of the degree of leverage |
81. |
According to …. principle the ideal pattern of capital structure is one that tends to minimize the cost of financing. |
A. | Control principle |
B. | Cost principle |
C. | Risk principle |
D. | Flexibility principle |
Answer» B. Cost principle |
82. |
….principle says that issue of debt and preference shares do not affect the interest of equity share holders. |
A. | Cost principle |
B. | Risk principle |
C. | Control principle |
D. | Timing principle |
Answer» C. Control principle |
83. |
Who Introduced Net Income approach? |
A. | David Durand |
B. | Walter |
C. | Gordon |
D. | Modigliani and Miller |
Answer» A. David Durand |
84. |
One of the important assumptions of NI approach is…... |
A. | Cost of debt > cost of equity |
B. | Cost of debt < cost of equity |
C. | Cost of debt = Cost of equity |
D. | None of the above |
Answer» B. Cost of debt < cost of equity |
85. |
Traditional approach of capital structure is also known as…. |
A. | Neutral approach |
B. | Mixed approach |
C. | Intermediate approach |
D. | Parallel |
Answer» C. Intermediate approach |
86. |
……… is not a financing method for merger and acquisition. |
A. | Cash |
B. | Vendor placing |
C. | Convertible bond |
D. | Factoring |
Answer» D. Factoring |
87. |
Convertible bonds are not …… |
A. | Straight bonds |
B. | Converted to ordinary shares |
C. | Two stage financial instrument |
D. | Hybrid securities |
Answer» A. Straight bonds |
88. |
A lease agreement grants lessee the right to…. |
A. | Own the asset |
B. | Use the asset |
C. | Own and use the asset |
D. | Sell the asset |
Answer» B. Use the asset |
89. |
Operating lease is favoured by the lessee in respect of assets which depreciate in value on account of ….. |
A. | Obsolescence |
B. | Wear and tear |
C. | Exhaustion |
D. | Fire |
Answer» A. Obsolescence |
90. |
A “sale and lease back” arrangement is suitable for a lessee having….. |
A. | Liquidity crisis |
B. | Surplus fund |
C. | High profit |
D. | Loss |
Answer» A. Liquidity crisis |
91. |
Basic lease period refers to the period during which lease is irrevocable. |
A. | True |
B. | False |
C. | none |
D. | all |
Answer» A. True |
92. |
The lessee can protect himself against obsolescence by entering into a capital lease agreement with the lessor. |
A. | True |
B. | False |
C. | none |
D. | all |
Answer» B. False |
93. |
A ---------- lease is a way of providing finance |
A. | Leveraged |
B. | Operating |
C. | Finance |
D. | Sale and lease back |
Answer» C. Finance |
94. |
MVA stands for…. |
A. | Maximum value added |
B. | Minimum value added |
C. | Market value added |
D. | Most value added |
Answer» C. Market value added |
95. |
A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the remaining assets more efficiently is engaging in __________. |
A. | Strategic acquisition |
B. | Two tier tender offer |
C. | A financial acquisition |
D. | Shark repellent |
Answer» A. Strategic acquisition |
96. |
The ways in which mergers and acquisitions occur do not include: |
A. | Conglomerate takeover |
B. | Vertical integration |
C. | Diversification |
D. | Horizontal integration |
Answer» C. Diversification |
97. |
Which among the following does not consider time value of money? |
A. | NPV |
B. | Payback period |
C. | IRR |
D. | Discounted payback period |
Answer» B. Payback period |
98. |
How do we calculate economic value added (EVA)? |
A. | EVA= NOPAT – (WAAC x Capital invested) |
B. | EVA = NOI- Cost of capital |
C. | EVA = EPS x WACC |
D. | EVA= PER x WACC |
Answer» A. EVA= NOPAT – (WAAC x Capital invested) |
99. |
Retained earnings is……. |
A. | An Indication of a company’s liquidity |
B. | The same as cash in the bank |
C. | Not important when determining dividends |
D. | The cumulative earnings of the company after dividends |
Answer» D. The cumulative earnings of the company after dividends |
100. |
Economic value added indicates…. |
A. | Value added to economy |
B. | Financial performance based on residual wealth |
C. | Net profit |
D. | Expected amount of dividend |
Answer» B. Financial performance based on residual wealth |
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